The CFPB charged Los Angeles-based Westlake Services LLC and Wilshire Consumer Credit LLC with deceiving consumers by calling under false pretenses and using phony caller ID information. The bureau also alleged that the finance source and its subsidiary falsely threatened to refer borrowers for investigation or criminal prosecution, and illegally disclosed information about debts to borrowers’ employers, friends, and family.

The bureau ordered the companies to overhaul their debt-collection practices and to provide consumers with $44.1 million in cash relief and balance reductions. The companies will also pay a civil penalty of $4.25 million.

“There’s no excuse for lying to your customers, and today’s action will provide millions of dollars in relief for borrowers caught up in Westlake and Wilshire’s deception,” CFPB Director Richard Cordray stated in the bureau’s press release. “Consumers struggling to pay their bills deserve to be treated with respect, not subjected to illegal threats and deceptive phone calls. We will continue to clean up the debt collection market and root out these illegal and inexcusable practices.”

The CFPB found that Westlake and Wilshire deceived borrowers into thinking they were being called by repossession companies, other third parties, or even the borrowers’ own family and friends. The CFPB’s investigation found that the companies’ debt collectors used a web-based service, Skip Tracy, to place outgoing calls and choose the phone number and caller ID text that the call recipient would see. Since January 2010, Westlake and Wilshire debt collectors have used Skip Tracy to place or receive calls associated with more than 137,000 loan accounts.

The bureau also found that the companies unlawfully disclosed information about borrowers’ debts to employers, family, and friends. The companies also failed to disclose the annual percentage rate on certain loans as required by law. In some cases, the companies changed the due dates or extended the terms of loans without borrowers’ permission, causing more interest to accrue while telling consumers that the extensions would have a positive effect. These practices violated the Fair Debt Collection Practices Act, the Truth in Lending Act (TILA), and the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act.

As part of the approximately $44.1 million in redress to victims, both companies must pay approximately $25.8 million in cash and provide the remainder in balance reductions. They must also end their alleged deceptive debt-collection practices, stop disclosing and threatening to disclose borrowers’ loan information to third parties, and must evaluate all of their advertisements for compliance with the TILA. They must also stop changing consumer due dates and extending consumer loans without explaining the impacts and without obtaining consent from customers.

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